Posted in Finance, Accounting and Economics Terms, Total Reads: 6734
Definition: Core Current Assets
Core current assets is permanent component of current assets which are required throughout the year for a company to run continuously and to stay viable. The term “Core Current Assets” was framed by Tandon Committee while explaining the amount of stock a company can hold in its current assets. Generally such assets are financed by long term funds. Sometimes core current assets are also referred as “Hardcore Working Capital”.
These assets are not liquid and so when companies are in need of money, they initially sell off non-core assets (assets which are not important for continuous functioning of a business) to raise money. If a company is ready to raise cash by selling its core current assets then this implies that the company is in dire situation or close to bankruptcy.
Examples of Core Current Assets are Raw materials, Work in Progress, Finished Goods, Cash in Hand and at Bank etc.
Examples of Non-Core Assets are natural resources, bonds, options and so on.
Both Core Current Assets and Non-Core Assets varies from industry to industry. Like for Real estate business, estate holdings might be core current assets but it would be different in case of Oil Industry.